The general secretary of the RCN, Dr Peter Carter, warns that unless the Government addresses the situation immediately, the devastating actions taken last year will continue to hit patient care and destabilise the NHS for the foreseeable future.

'The deficit issue is not history', said Dr Carter. 'It is real, entrenched and continues to hit patient care, services and jobs.'

The report shows how the government's insistence that trusts balance their books last year has led to thousands of jobs disappearing from the health service through a combination of redundancies, post deletions and recruitment freezes. Deficit-led cutsalso continue to hit hard across the NHS; specialist nurses are seeing their posts downgraded and lost, public health and training budgets are being used to plug deficits elsewhere in the system and newly qualified nurses are unable to find jobs.

Dr Gill Morgan, Chief Executive of the NHS Confederation said: 'Whilst the severest deficits are concentrated in a relatively small number of NHS organisations, many trusts have faced challenges this year. There are clearly tough times ahead for a minority of NHS trusts, but overall the NHS is getting back on track.'